Hoover et al v. Harvard Pilgrim Healthcare, Inc. et al
Filing
14
///ORDER granting 7 Motion to Dismiss. The clerk shall enter judgment accordingly and close the case. So Ordered by Chief Judge Joseph N. Laplante.(jb)
UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Randall Hoover et al.
v.
Civil No. 15-cv-367-JL
Opinion No. 2016 DNH 192
Harvard Pilgrim Healthcare,
Inc., et al.
MEMORANDUM ORDER
This insurance coverage action requires the court to apply
the limitations period in a health care coverage plan.
Plaintiffs Randall Hoover and Barbara Hoover sued to recover
costs associated with the treatment of their son, Gary Hoover,
after defendant United Behavioral Health, Inc. denied their
claim under Mrs. Hoover’s employer-provided health care plan.
This court has jurisdiction over this matter under 28 U.S.C.
§ 1332 (diversity) because the plaintiffs are New Hampshire
citizens, all defendants are citizens of other states, and the
amount in controversy exceeds $75,000.
The defendants have moved to dismiss the complaint, see
Fed. R. Civ. P. 12(b)(6), arguing that the Hoovers’ suit is
time-barred by the terms of the insurance plan.
Even if it were
not barred, defendants argue, the Hoovers have failed to state a
claim for breach of the covenant of good faith and fair dealing.
Concluding that the facts as set out by the complaint
demonstrate that plaintiffs failed to meet the plan’s two-year
deadline for filing a lawsuit to recover benefits, the court
grants defendants’ motion.
Applicable legal standard
To survive a motion to dismiss under Rule 12(b)(6), the
plaintiff must state a claim to relief by pleading “factual
content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.”
Martinez v. Petrenko, 792 F.3d 173, 179 (1st Cir. 2015) (quoting
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).
“Granting a
motion to dismiss based on a limitations defense is entirely
appropriate when the pleader’s allegations leave no doubt that
an asserted claim is time-barred.”
LaChapelle v. Berkshire Life
Ins. Co., 142 F.3d 507, 509 (1st Cir. 1998).
In ruling on such
a motion, the court accepts as true all well-pleaded facts set
forth in the complaint and draws all reasonable inferences in
the plaintiff’s favor.
See, e.g., Martino v. Forward Air, Inc.,
609 F.3d 1, 2 (1st Cir. 2010).
The court “may consider not only
the complaint but also facts extractable from documentation
annexed to or incorporated by reference in the complaint and
matters susceptible to judicial notice.”
Rederford v. U.S.
Airways, Inc., 589 F.3d 30, 35 (1st Cir. 2009).
2
Background
The following summary of the facts takes the approach
described above, drawing all inferences in the plaintiffs’
favor.
Plaintiffs Randall and Barbara Hoover bring this action
as next friends of their son, Gary Hoover.1
Barbara’s employer,
the University System of New Hampshire, provided the Hoovers’
health care benefits plan through Harvard Pilgrim.2
By agreement
with Harvard Pilgrim, UBH managed the plan’s mental health and
substance abuse benefits, including determining whether costs
associated with Harvard Pilgrim members’ use of mental health
and substance abuse services would be covered by the plan.
Gary has been diagnosed with Schizotypal Personality
Disorder and Alcohol Use Disorder.
Upon the recommendation of
his outpatient mental health service providers, Gary was
admitted to WestBridge Community Services in Manchester, New
Hampshire on November 1, 2012.
According to the complaint,
WestBridge is the only residential facility in New Hampshire
1Where
necessary for clarity’s sake, the court refers to the
plaintiffs by their first names. No undue familiarity or
disrespect is intended.
2The
pleadings and briefing leave unclear the relative positions
of defendants Harvard Pilgrim Healthcare, Inc., Harvard Pilgrim
Healthcare of New England, Inc., and HPHC Insurance Co., Inc.
Because those distinctions are not material to the questions
raised by defendants’ motion, the court refers to them
collectively as Harvard Pilgrim.
3
that treats both alcohol addiction and mental health symptoms
like Gary’s.
Harvard Pilgrim’s network of approved providers did not,
however, include WestBridge.
Under the Hoovers’ policy, Harvard
Pilgrim would pay benefits to out-of-network providers only in
emergencies or if no in-network provider offered the services
required.
Before Gary was admitted, Barbara called UBH, which
informed her that it would cover treatment by an out-of-network
provider “[i]f a network provider is not within thirty miles of
your residence . . . .”
Complaint (document no. 1-1) ¶ 30.
WestBridge’s billing department also contacted UBH, and was told
that UBH authorized Gary’s treatment at WestBridge and that
“[m]uch of the invoiced charges would be paid . . . .”
Id.
¶¶ 33, 35.
When WestBridge submitted its first invoice, however, UBH
denied coverage on the grounds that Gary could obtain in-patient
mental health services at Concord Hospital, an in-network
provider.
Id. ¶¶ 37-38.
The plaintiffs allege that Concord
Hospital could not meet Gary’s needs because it provides only
short-stay crisis stabilization mental health services and outpatient substance abuse services, whereas Gary’s prior mental
health providers determined that Gary required a long-term dual
diagnosis residential service.
WestBridge can provide that
4
service but, according to the complaint, Concord Hospital
cannot.
Id. ¶ 39.
Plaintiffs’ policy provided for an expedited appeal
process, of which the plaintiffs availed themselves.
After
consulting with Gary’s doctor at WestBridge, and after a review
of his appeal by a consultant psychiatrist, Harvard Pilgrim
affirmed the denial of benefits on November 12, 2012.
More than two years later, on February 18, 2015, the
Hoovers filed their complaint in Strafford County Superior
Court, asserting a single claim for breach of the covenant of
good faith and fair dealing.
action to this court.
Defendants timely removed the
Defendants now move to dismiss, see Fed.
R. Civ. P. 12(b)(6), arguing that plaintiffs’ suit is timebarred under the terms of the benefits plan and, further, that
plaintiffs have failed to plead facts necessary to state a claim
for relief under the implied covenant of good faith and fair
dealing.
Analysis
When resolving a motion to dismiss based on a limitations
defense, the court must consider “whether the complaint and any
documents that properly may be read in conjunction with it show
beyond doubt that the claim asserted is out of time.”
Rodi v.
S. New England Sch. of Law, 389 F.3d 5, 17 (1st Cir. 2004).
5
The
relevant plan provision states:
“Any legal action against the
Plan for failing to provide Covered Benefits must be brought
within two years of the denial of any benefit.”3
(document no. 7-3) at 51.
Plan Handbook
At oral argument, plaintiffs conceded
the enforceability of the 2-year limitation period.4
Plaintiffs
further conceded that their claim, though dressed as one for a
breach of the implied covenant of good faith and fair dealing,
is a “legal action against the Plan for failing to provide
Covered Benefits.”5
The court therefore turns its attention to
3Plaintiffs
invoke both the benefits plan itself and the
defendants’ November 2012 denials of their benefits in the
complaint. As there is no dispute as to the authenticity of
these documents, the court may properly consider them in
resolving the instant motion. See Rodi, 389 F.3d at 12.
4Nor
would the plaintiffs have much success in disputing them.
Such contractual provisions are generally enforceable, as long
as the foreshortened limitations period is “reasonable.”
Heimeshoff v. Hartford Life & Acc. Ins. Co., 134 S. Ct. 604, 610
(2013); see also Maynard v. U.S. Health & Acc. Co., 76 N.H. 275,
275 (1911) (insurance policy provision under which suits must be
brought within six months after filing affirmative proof of
disability was “legal and binding.”). Plaintiffs do not argue
that the two-year limitation is unreasonable. Indeed,
limitations periods of two years or less have been found to meet
that standard in the insurance context. See, e.g., Island View
Residential Treatment Ctr. v. Blue Cross Blue Shield Of Mass.,
Inc., 548 F.3d 24, 27 (1st Cir. 2008) (two years); Heimeshoff,
134 S. Ct. at 612-13 (one year); cf. Maynard, 76 N.H. at 275
(six months).
5Though
plaintiffs style their claim as one for a breach of the
covenant of good faith and fair dealing, their objective is
reimbursement of the expenses they claim ought have been covered
by the Harvard Pilgrim plan. See Compl. (document no. 1-1)
¶ 42. In the ERISA context, courts have viewed such claims as
benefits claims, however styled. See, e.g., Sarkisyan v. CIGNA
6
determining (1) when the limitations term began to run, and
(2) whether the allegations in the complaint, construed in the
plaintiffs’ favor, show beyond doubt that plaintiffs filed this
action after the limitations period concluded.
Under the language of the Harvard Pilgrim plan, the twoyear limitations period begins after “the denial of any
benefit.”
UBH initially denied the Hoovers’ claim by letter
dated November 2, 2012.
The Hoovers challenged this denial
through Harvard Pilgrim’s internal appeal process.
The Hoovers’
claim was again denied, this time by Harvard Pilgrim, by letter
dated November 12, 2012.
Defendants argue that the limitations
period accordingly began to run, at the latest, on November 12,
2012, when Harvard Pilgrim issued its “final decision on
[plaintiffs’] appeal.”
Document no. 7-5 at 15.
Healthcare of Cal., Inc., 613 F. Supp. 2d 1199, 1205 (C.D. Cal.
2009) (plaintiff's contract-based claims were, in essence,
claims for payment of benefits, and preempted by ERISA); Hyder
v. Kemper Nat. Servs., Inc., 390 F. Supp. 2d 915, 919 (N.D. Cal.
2005) (same); cf. Kiedaisch v. Nike, Inc., 2004 DNH 038, 8
(“look[ing] beyond the complaint's characterization of
plaintiff's claims and focus[ing] on precisely what plaintiff
alleges” to determine whether wrongful termination claim was
preempted by ERISA). Though ERISA preemption is not at issue
here because the plan is provided by a governmental entity, see
29 U.S.C. § 1003(b)(1) (exempting “governmental plan” from
ERISA); id. § 1002(32) (defining “governmental plan”), the court
sees no reason not to apply parallel reasoning and consider the
plaintiffs’ claim, as circumscribed by the plaintiffs’ factual
allegations (that they were denied benefits to which they were
entitled) and requested recovery (the benefits in question), to
be a benefits claim.
7
Plaintiffs, without authority or further explanation,
assert only that “[i]t is not possible for the limitations
period to start running before [Gary] exhausted his
administrative appeals,” and so, “the period had not been
exhausted before Gary filed the Complaint.”
Mem. in Support of
Obj. to Mot. to Dismiss (document no. 10-1) at 4.
As far as the
court can tell, plaintiffs are alluding to the fact that, in the
ERISA context, “[c]ourts have generally required participants to
exhaust the plan's administrative remedies before filing suit to
recover benefits.”
Heimeshoff, 134 S. Ct. at 608; see also id.
at 610 (“[a] participant’s cause of action . . . does not accrue
until the plan issues a final denial,” that is, after the
participants have “exhaust[ed] internal review” processes.).
Accordingly, plaintiffs appear to argue, the contractual
limitations period could not begin to run until after Gary
exhausted his administrative appeals, including an independent,
external review of Harvard Pilgrim’s decision, which he
initiated on March 2, 2013.6
6At
oral argument, the plaintiffs also argued that the plan
document is internally ambiguous as to when the limitations
period begins to run, regardless of any external review. Having
failed to raise that argument in their memorandum, plaintiffs
waived it. Iverson v. City Of Boston, 452 F.3d 94, 102-03 (1st
Cir. 2006).
8
The complaint is, notably, silent about Gary’s pursuit of
this external review.
The plaintiffs asserted those facts, for
the first time and without evidentiary support, in their
objection to this motion.
See Mem. in Support of Obj. to Mot.
to Dismiss (document no. 10-1) at 4.
The court, accordingly,
may not consider those allegations in deciding defendants’
motion to dismiss under Rule 12(b)(6).
Trans-Spec Truck Serv.,
Inc. v. Caterpillar Inc., 524 F.3d 315, 321 (1st Cir. 2008)
(“Under Rule 12(b)(6), the district court may properly consider
only facts and documents that are part of or incorporated into
the complaint”).
Absent that factual wrinkle, the plaintiffs’
complaint clearly falls outside the 2-year statute of
limitations that they concede is applicable here.
Even were the court to consider the plaintiffs’ allegations
concerning the external review,7 it would come to the same
result.
Courts that have considered the issue generally
conclude that, because plan participants are not required to
participate in external reviews, plaintiffs need not exhaust
that process before bringing suit.
7Though
See, e.g., Goldman v. BCBSM
the plaintiffs failed to plead it, at oral argument, all
parties agreed that Gary had, indeed, pursued an external review
of Harvard Pilgrim’s decision as alleged by the plaintiffs. See
Maloy v. Ballori-Lage, 744 F.3d 250, 251 (1st Cir. 2014)
(regarding allegations made in affidavit as part of the
pleadings absent any objection by defendant).
9
Found., 841 F. Supp. 2d 1021, 1026 (E.D. Mich. 2012)
(administrative processes exhausted upon completing internal
review because external review is not mandatory); Bailey v.
Chevron Corp. Omnibus Health Care Plan, No. SACV 13-1366, 2014
WL 2219216, at *2 (C.D. Cal. May 7, 2014) (same); but see
Casatelli v. Horizon Blue Cross Blue Shield of N.J., No. 2:09CV-6101, 2010 WL 3724526, at *6 (D.N.J. Sept. 13, 2010) (plan’s
language rendered external review mandatory before judicial
action).
The language of Harvard Pilgrim’s November 12, 2014
letter supports a similar conclusion here, as it informed
plaintiffs that, if they disagreed with its decision, they “may
have additional appeal rights,” including an external review of
that decision or pursuit of legal action, and that external
review of Harvard Pilgrim’s decision was only available “[u]nder
certain circumstances.”
Document no. 7-5 at 15-16.
The
November 12, 2012 letter explicitly characterized the external
review process that Gary pursued as “voluntary.”
See document
no. 7-5 at 15 (“You may file a request for external review
completing the enclosed form entitled ‘Request for Voluntary
Independent External Review’ . . . .”).
Whether or not
plaintiffs chose to pursue further external review or
litigation, the November 12, 2012 letter leaves room for no
other interpretation than that it served as Harvard Pilgrim’s
final decision.
The court accordingly concludes that the
10
limitations period began to run when the plaintiffs completed
the internal review process, which is to say, no later than
November 12, 2012.
“Where the dates included in the complaint show that the
limitations period has been exceeded and the complaint fails to
‘sketch a factual predicate’ that would warrant the application
of either a different statute of limitations period or equitable
estoppel, dismissal is appropriate.”
524 F.3d at 320.
Trans-Spec Truck Serv.,
That is the case here.
The two-year
limitations period began on November 12, 2012.
The plaintiffs
filed their complaint on February 18, 2015, more than two years
later.8
The complaint contains no factual allegations that would
warrant tolling the limitations period or application of another
limitations period.
Plaintiffs’ claim is, therefore, time-
barred, and their complaint must be dismissed.9
8The
court observes with some curiosity that the complaint and
plaintiffs’ verifications are dated September 4, 2014, which
would be well within the two-year limitations’ period even if it
began to run, as defendants argue, on November 12, 2012. This
suggests, at the very least, that two years was not an
unreasonable period, insofar as it afforded the plaintiffs ample
time to investigate and prepare their claim.
9Accordingly,
the court need not and does not reach the question
of whether the plaintiffs pled facts sufficient to state a claim
for breach of the implied covenant of good faith and fair
dealing.
11
Conclusion
Accordingly, defendants’ motion to dismiss10 plaintiffs’
complaint is GRANTED.
The clerk shall enter judgment
accordingly and close the case.
SO ORDERED.
____________________________
Joseph N. Laplante
United States District Judge
Dated:
cc:
May 9, 2016
Michael T. Pearson, Esq.
John-Mark Turner, Esq.
10Document
no. 7.
12
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